Barclays : Full Year 2022 Results Announcement

Barclays PLC

2022 Results Announcement

31 December 2022

Table of Contents

Results Announcement	Page
Notes	1
Performance Highlights	2
Group Finance Director's Review	6
Results by Business
•	Barclays UK	8
•	Barclays International	11
•	Head Office	16
Quarterly Results Summary	17
Quarterly Results by Business	18
Performance Management
•	Margins and Balances	24
•	Remuneration	26
Risk Management
• Risk Management and Principal Risks	28
•	Credit Risk	29
•	Market Risk	49
• Treasury and Capital Risk	50
Statement of Directors' Responsibilities	63
Condensed Consolidated Financial Statements	64
Financial Statement Notes	69
Appendix: Non-IFRS Performance Measures	77
Shareholder Information	84

BARCLAYS PLC, 1 CHURCHILL PLACE, LONDON, E14 5HP, UNITED KINGDOM. TELEPHONE: [phone]. COMPANY NO. 48839.

Barclays PLC

Notes

The terms Barclays and Group refer to Barclays PLC together with its subsidiaries. Unless otherwise stated, the income statement analysis compares the year ended 31 December 2022 to the corresponding 12 months of 2021 and the three months ended 31 December 2022 to the corresponding three months in 2021 and balance sheet analysis as at 31 December 2022 with comparatives relating to 31 December 2021. The historical financial information used for the purposes of such analysis has been restated. Please refer to Supplementary Information contained herein for further information. The abbreviations '£m' and '£bn' represent millions and thousands of millions of Pounds Sterling respectively; the abbreviations '$m' and '$bn' represent millions and thousands of millions of US Dollars respectively; and the abbreviations '€m' and '€bn' represent millions and thousands of millions of Euros respectively.

There are a number of key judgement areas, for example impairment calculations, which are based on models and which are subject to ongoing adjustment and modifications. Reported numbers reflect best estimates and judgements at the given point in time.

Relevant terms that are used in this document but are not defined under applicable regulatory guidance or International Financial Reporting Standards (IFRS) are explained in the results glossary, which can be accessed at home.barclays/investor-relations.

The information in this announcement, which was approved by the Board of Directors on 14 February 2023, does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2022, which contained an unmodified audit report under Section 495 of the Companies Act 2006 (which did not make any statements under Section 498 of the Companies Act 2006) have been delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.

These results will be furnished on Form 6-K with the US Securities and Exchange Commission (SEC) as soon as practicable following their publication. Once furnished with the SEC, a copy of the Form 6-K will be available from the SEC's website at www.sec.gov.

Barclays is a frequent issuer in the debt capital markets and regularly meets with investors via formal road-shows and other ad hoc meetings. Consistent with its usual practice, Barclays expects that from time to time over the coming quarter it will meet with investors globally to discuss these results and other matters relating to the Group.

Non-IFRS performance measures

Barclays' management believes that the non-IFRS performance measures included in this document provide valuable information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the businesses' performance between financial periods and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by Barclays' management. However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well. Refer to the appendix on pages 77 to 83 for further information and calculations of non-IFRS performance measures included throughout this document, and the most directly comparable IFRS measures.

Forward-looking statements

This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to the Group. Barclays cautions readers that no forward- looking statement is a guarantee of future performance and that actual results or other financial condition or performance measures could differ materially from those contained in the forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as 'may', 'will', 'seek', 'continue', 'aim', 'anticipate', 'target', 'projected', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe', 'achieve' or other words of similar meaning. Forward-looking statements can be made in writing but also may be made verbally by directors, officers and employees of the Group (including during management presentations) in connection with this document. Examples of forward-looking statements include, among others, statements or guidance regarding or relating to the Group's future financial position, income levels, costs, assets and liabilities, impairment charges, provisions, capital, leverage and other regulatory ratios, capital distributions (including dividend policy and share buybacks), return on tangible equity, projected levels of growth in banking and financial markets, industry trends, any commitments and targets (including environmental, social and governance (ESG) commitments and targets), business strategy, plans and objectives for future operations and other statements that are not historical or current facts. By their nature, forward- looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements speak only as at the date on which they are made. Forward-looking statements may be affected by a number of factors, including, without limitation: changes in legislation, regulation and the interpretation thereof, changes in IFRS and other accounting standards, including practices with regard to the interpretation and application thereof and emerging and developing ESG reporting standards; the outcome of current and future legal proceedings and regulatory investigations; the policies and actions of governmental and regulatory authorities; the Group's ability along with governments and other stakeholders to measure, manage and mitigate the impacts of climate change effectively; environmental, social and geopolitical risks and incidents and similar events beyond the Group's control; the impact of competition; capital, leverage and other regulatory rules applicable to past, current and future periods; UK, US, Eurozone and global macroeconomic and business conditions, including inflation; volatility in credit and capital markets; market related risks such as changes in interest rates and foreign exchange rates; higher or lower asset valuations; changes in credit ratings of any entity within the Group or any securities issued by it; changes in counterparty risk; changes in consumer behaviour; the direct and indirect consequences of the Russia-Ukraine war on European and global macroeconomic conditions, political stability and financial markets; direct and indirect impacts of the coronavirus (COVID-19) pandemic; instability as a result of the UK's exit from the European Union (EU), the effects of the EU- UK Trade and Cooperation Agreement and any disruption that may subsequently result in the UK and globally; the risk of cyber-attacks, information or security breaches or technology failures on the Group's reputation, business or operations; the Group's ability to access funding; and the success of acquisitions, disposals and other strategic transactions. A number of these factors are beyond the Group's control. As a result, the Group's actual financial position, results, financial and non-financial metrics or performance measures or its ability to meet commitments and targets may differ materially from the statements or guidance set forth in the Group's forward-looking statements. Additional risks and factors which may impact the Group's future financial condition and performance are identified in Barclays PLC's filings with the SEC (including, without limitation, Barclays PLC's Annual Report on Form 20-F for the financial year ended 31 December 2022), which are available on the SEC's website at www.sec.gov.

Subject to Barclays PLC's obligations under the applicable laws and regulations of any relevant jurisdiction (including, without limitation, the UK and the US) in relation to disclosure and ongoing information, we undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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Performance Highlights

In 2022 Barclays delivered a profit before tax of £7.0bn and return on tangible equity (RoTE) of

10.4%, with total capital distributions equivalent to c.13.4p per share

C. S. Venkatakrishnan, Group Chief Executive, commented

"Barclays performed strongly in 2022. Each business delivered income growth, with Group income up 14%. We achieved our RoTE target of over 10%, maintained a strong Common Equity Tier 1 (CET1) capital ratio of 13.9%, and returned capital to shareholders. We are cautious about global economic conditions, but continue to see growth opportunities across our businesses through 2023."

Key financial metrics:

	Income	Cost: income	Profit	Attributable	RoTE	EPS	TNAV per	CET1	Total capital
	ratio	before tax	profit	share	ratio	return1
FY22	£25.0bn	67%	£7.0bn	£5.0bn	10.4%	30.8p			c.13.4p
295p	13.9%	equivalent
Q422	£5.8bn	69%	£1.3bn	£1.0bn	8.9%	6.5p

Demonstrating execution against our three strategic priorities:

• Deliver next generation digitised consumer financial services: simplifying and upgrading online banking services - with over 10.5 million Barclays UK mobile banking app users, and log-ins up 8% year-on-year. c.220k 'Rainy Day Saver' accounts opened online since launch on 29 September 2022, 41% are new or re-joining Blue Rewards customers. In the US Consumer Bank, the Gap portfolio2 integration onto our platform doubled our US customer base to over 20 million
• Deliver sustainable growth in the Corporate and Investment Bank (CIB): 114bps of revenue share gain in Global Markets from 2019-20223; second fastest growth rate across the top 10 global peers. Investment in Financing businesses delivered more stable, high returning income of £2.9bn in 2022 reflecting a compound annual growth rate (CAGR) of 16% since 2019
• Capture opportunities as we transition to a low-carbon economy: new expanded target to facilitate $1 trillion of Sustainable and Transition Financing by the end of 2030. The Group's Sustainable Impact Capital investment mandate is now £500m by the end of 2027

2022 Performance highlights4:

• Group attributable profit of £5.0bn and RoTE of 10.4%, with all operating divisions delivering double-digit returns
• • Excluding the impact of Over-issuance of Securities in the US (Over-issuance of Securities)5, RoTE was 11.6%
• Group profit before impairment of £8.2bn, up 9% year-on-year
• Group income of £25.0bn, up 14% year-on-year with broad-based momentum across our operating divisions and the benefit from FX:
• • CIB income increased by 8%; the best full year for both Global Markets and FICC6, and strong performance in Transaction banking, more than offsetting the impact of a reduced fee pool in Investment Banking7
  • Consumer, Cards and Payments (CC&P) income increased by 35% supported by higher balances in US cards and Private Bank with turnover growth in Payments
  • Barclays UK income increased by 11% primarily driven by the rising rate environment
• Group operating expenses were £16.7bn, reflecting £1.6bn of litigation and conduct charges, primarily driven by the Over-issuance of Securities
• • Group operating expenses excluding litigation and conduct were £15.1bn, up 6% year-on-year, reflecting the impact of FX and inflation
• Credit impairment charges were £1.2bn, with a loan loss rate (LLR) of 30bps, reflecting macroeconomic deterioration, partially offset by the utilisation of post-model adjustments (PMAs) for macroeconomic uncertainty and the release of COVID-19 related adjustments informed by refreshed scenarios. Coverage ratios at the portfolio level remain strong
• CET1 ratio of 13.9% and tangible net asset value (TNAV) per share of 295p
• Capital distributions: total dividend for 2022 of 7.25p per share (2021: 6.0p), including a 5.0p per share 2022 full year dividend. Intend to initiate a share buyback of up to £0.5bn, bringing the total share buybacks announced in relation to 2022 to £1.0bn and total capital return equivalent to c.13.4p per share

• Includes total dividend for 2022 of 7.25p per share and total share buybacks announced in relation to 2022 of £1.0bn.
  2 The Gap portfolio refers to the Gap Inc. US credit card portfolio.
  3 Barclays' calculations using Peer reported financials.
  4 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
  5 Denotes the Over-issuance of Securities under Barclays Bank PLC's (BBPLC) US shelf registration statements on Form F-3 filed with the SEC in 2018 and 2019. See page 5 for reconciliation of Barclays' performance excluding the impact of the Over-issuance of Securities.
  6 Period covering 2014-2022. Pre 2014 data was not restated following re-segmentation in 2016.
  7 Data source: Dealogic for the period covering 1 January to 31 December 2022.

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Performance Highlights

Q422 Performance highlights1:

• Attributable profit was £1.0bn and RoTE was 8.9% with profit before impairment of £1.8bn, up 29% year-on-year with positive cost: income jaws of 6%
• Group income was £5.8bn, up 12% year-on-year including the benefit from FX, with strong performances in Barclays UK and CC&P. Within CIB, strong performances in Global Markets and Transaction banking were more than offset by reduced income in Investment Banking and Corporate Lending
• Group operating expenses were £4.0bn, up 6% year-on-year, reflecting the impact of FX, inflation and investment in the business
• Credit impairment charges were £0.5bn with an LLR of 49bps. The deteriorating macroeconomic forecast resulted in an increased charge, partially offset by utilising economic uncertainty PMAs

Outlook:

• Returns: targeting RoTE of greater than 10% in 2023
• Income: diversified income streams continue to position the Group well for the current economic and market environment including higher interest rates. In 2023, Barclays UK net interest margin (NIM) is expected to be greater than 3.20%2
• Costs: targeting a cost: income ratio percentage in the low 60s in 2023, investing for growth whilst progressing towards the Group's medium-term target of below 60%
• Impairment: expect an LLR of 50-60bps in 2023, based on the current macroeconomic outlook
• Capital: expect to operate within the CET1 ratio target range of 13-14%
• Capital returns: capital distribution policy incorporates a progressive ordinary dividend, supplemented with buybacks as appropriate

• 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.

• Assumes the UK bank rate peaks at 4.25% in 2023.

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